Charter Communications Upgrade Warrants Attention

 | Feb 05, 2018 | 12:34 PM EST
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Charter Communications (CHTR) was upgraded today to BUY by's quantitative service. Do the charts and technical indicators concur? Let's check.

In this daily bar chart of CHTR, below, we can see that prices rallied last month to move above the rising 50-day moving average and the bullish 200-day line. The 50-day average is only slightly below the slower-to-respond 200-day line and we could see a bullish golden cross in the near-future if the 50-day crosses above the 200-day line. The daily On-Balance-Volume (OBV) line has been rising since the middle of December and tells us that buyers of CHTR have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is well above the zero line in bullish territory but the two moving averages that make up this indicator have narrowed. The price action in the near-term will determine if we see a cross sell signal or not.

In this weekly bar chart of CHTR, below, we can see that CHTR has been in an uptrend for the past two years. Prices are above the rising 40-week moving average line after spending about two months below it. The weekly OBV line just moved up to a new high for the move up confirming the price gains. The weekly MACD oscillator crossed upward last month for a cover shorts buy signal and this month it is above the zero line for an outright go long signal.

In this Point and Figure chart of CHTR, below, we can see that prices broke out of a consolidation pattern at $365.90. A rally to $412.31 would be another important breakout. A longer-term potential price target of $458.65 is projected.

Bottom line -- I like it when two investment disciplines favor a stock. I would look to buy CHRT on strength above $400 and $410. Risk a close below $365 looking for gains the $450 area.

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